Stop loss is the root of the money
An old man with his own cage to catch turkeys, he just spread the bait cashback forex profit calculator the cage cashbackforexprofitcalculator hide in a very far away place quietly waiting, in the turkeys cashbackforexpipcalculatorre lured into the cage to reach the best number of time to pull the traction organ of the thin rope gently can be harvested One day, there are 12 turkeys into the cage, after a while one of them ate a full run out should have known that just now should pull the rope! The old man said, "Hey, wait a little longer, maybe that one will come back. After a while, two cashback forex turkeys got fed and ran out. The old man regretted, "I will definitely stop if I catch one more. As a result, more and more turkeys got fed and left the cage, but he still did not want to give up his hope of catching one more because once there were 12 in the cage, less than 5 he did not want to go home. And hey! Either all run away, or come back to a I was willing to give up the results of the single turkey also ate enough to find a companion to go, the old man could only return empty-handed This is ONeil (WilliamJ.O'Neil) quoted Fred Kelly (FredC.Kelly) told a story to investors, it reflects the general mindset of investors in this market in this market everyone Will make mistakes, even a good investor can not be able to make the right decision at all times, it is more critical to make mistakes to minimize the amount of their losses Warren Buffett also told people two similar guidelines: guideline one, never lose money; guideline two, never forget the guideline one incredibly, several of the most successful international investors are almost all in compliance with the same guidelines People who violate this guideline often lose a lot of money, even the brilliant moment of investors are inevitably the exception in the process of the decline of the U.S. stock market in 1998, the Long Term Capital Management Fund (LTCM) managed assets shrunk from $5 billion to $400 million in just six months, and the accumulation period of $5 billion in assets for up to four years believe that many investors in the A-share market more or less have similar experiences, when we When we make investments around the goal of making money rather than preserving capital, we will always face the risk of incurring huge losses in the stocks we choose, although there are always some that can achieve expectations, some that exceed expectations, but there will always be some that make us lose a lot of money, if we ignore the necessary stop loss and let the losses expand, those excellent stocks to our assets to bring appreciation part will be greatly reduced In fact, the All stocks have the potential to bring risk, whether quality stocks or poor quality stocks, in the industry when all analysts are bullish, the stock price may have quietly risen to the top of the pricing of stocks are somewhat like commodities, when everyone coaxed into buying, stock prices climb until there is a suitable high price just to make the supply and demand balance so far In fact, in the market pullback of 10%-20%, many stocks In fact, in the market pullback of 10%-20%, many stocks may have to fall more than 50%, many of which we previously identified as having potential stocks In the volatility of the stock market, the markets excessive expectations usually amplify such results, in the stock madness up when investors frantically buy, when the stock fell but hold the stock, allowing losses continue to magnify, for the top-performing stocks is even more so funds always have the opportunity to gain, the initial fall in stock prices without any reaction, not to better The only way to stop a loss is to get out as soon as possible when the loss is not too big, and to make a good choice of industries and stocks in order to wait patiently for the next opportunity to make money. I believe that many investors focus their goals mainly on making money, and neglect to improve their portfolios through stop losses in our portfolios. If we dont make adjustments, even if we choose better stocks and bring good returns to the portfolio, these poor stocks will always offset the gains we have made from the stocks we have worked so hard to choose if we continue to stop loss on poor quality stocks, we can see a process of portfolio Pareto improvement because we never invest in the stock market to lose money.